The Elections in Peru

Trend: Natural resource protectionism will continue to increase commodity prices in the global economy.

Jim Jubak at MSN Investing describes the election dynamics in Peru and the markets that may be affected.

Source: MSN Money - 3 new global hot spots for investors - Jubak's Journal

Peru's presidential election, which will take place April 9, is important to your portfolio if you own shares of just about any mining company and, maybe, for stocks in the energy sector, too.

The front-runner, Ollanta Humala, is a radical ultranationalist who has promised to revoke contracts with the overseas mining and energy companies that produce copper, tin, silver and natural gas in the country. At the least, a Humala administration could be counted on to raise the taxes and royalties paid by foreign mining and energy companies. At worst, companies could look forward to demands for 50% ownership in mining and energy projects.

An interview that Humala granted to Spain's ABC newspaper sums up his strategy: "Our natural resources are committed to foreign capital and they do not yield any profit for us."

...With copper supplies already tight and tin inventories falling, an election victory by Humala could send prices for these and other metals soaring even from current levels. Peru is the world's fourth-largest copper producer, the fifth-largest gold producer, the third-largest zinc producer and the second-largest silver producer.